Monday, March 23, 2009

The Government is in danger of creating a digital divide by discouraging investment in superfast connectivity unless it reviews the issue of fibre taxation. Despite Government backing next generation Internet applications and the use of fibre optic cable, it has continued to tax the rateable value of the basic infrastructure.

Elfed Thomas, CEO and founder of i3 Group, is calling on the Government to review the issue of fibre taxation ahead of the Digital Britain report expected later this month. He fears the imposition of the tax will create a digital divide between those companies able to afford the rate, and so benefit from superfast connectivity and those unable to offset the tax and thereby relying on the traditional copper networks.

He said: "Now is not the time for the Government to impose this tax. Fibre taxation is an issue which has been around for almost a decade but never before has it been such a potentially hot topic. Its resurgence comes as the Government is expected to back recommendations for the national deployment of dark fibre - to meet the requirement for universal Internet access to at least 2Mbps broadband speeds by 2012 in the Digital Britain report.

Given the Governments expressed commitment to ensure that the entire population has access to a less than ambitious 2Mbs, this is tax is clearly out of step with this aim.It seems that the Treasury is still unaware of what is meant by “joined-up Government”.With one branch of Government committed to improving Internet access for all whilst the Treasury tie the hands of industry behind its back by demanding an income from the means to deliver it!

Japan, Singapore, China, Sweden, Denmark and even Italy are rather more enlightened than the UK Government’s piece meal approach.As I wrote last November in “When will the next generation broadband start to deliver for the UK”, our Government’s current approach and that of BT lacks the vision to deliver genuine advantage for UK plc in this crucial infrastructure.Gordon Brown needs to get Lord Mandelson and Alastair Darling talking about something other than bonuses for failure in our Banks.